Key Points
- Bitcoin’s price has been recovering, potentially indicating a bullish breakout, due to increased stablecoin supply on cryptocurrency exchanges.
- Major global stock indexes, including NIKKEI 225, are also showing signs of recovery.
The price of Bitcoin (BTC) has been recovering from a recent dip, climbing above the significant $58k support level on August 16.
This comes after the coin’s price briefly dropped to $56k the previous day.
Stablecoins and Crypto Exchanges
The recovery coincides with a rise in the supply of stablecoins on various cryptocurrency exchanges.
After the global market crash on August 5, known as Black Monday, stablecoin insurers have produced more than $1.5 billion.
This new capital has been distributed across different centralized exchanges.
Historical data suggests that a sharp increase in stablecoin supply on these exchanges often precedes a bullish market trend.
Cumberland, a leading crypto liquidity provider, has reportedly received 1.28 billion USDT from stablecoin issuers Tether on the Ethereum (ETH) network.
Approximately 1.23 billion of this has been deposited into various exchanges.
In addition, Cumberland has deposited $320 million into different CEXs in the past 24 hours, funds that were received from Tether Treasury.
In fact, $639 million was deposited into Coinbase Global Inc. (NASDAQ: COIN), forwarded on behalf of institutional investors.
Around $288 million was forwarded by Cumberland to Kraken for its customers, and about $180 million was sent to the OKX crypto exchange.
Increasing Stablecoin Supply
Stablecoin issuer Circle Internet Financial recently minted 250 million USDC on the Solana network.
Since April, Circle has minted a total of 4.5 billion USDC on the Solana network, significantly increasing its overall liquidity, particularly for meme coins.
As a result, the supply of stablecoins on centralized exchanges has reached a new multi-month high, indicating increased buying power.
Moving forward, traders are carefully watching for potential market weakness and are eagerly awaiting speeches by Bank of Japan’s Governor Kazuo Ueda and Fed Chair Jerome Powell for insights into the economic outlook.
Furthermore, the US Fed is expected to cut its interest rate for the first time since the Covid pandemic in September.
After a five-month correction period, Bitcoin’s price is on the verge of a major bullish breakout before the end of this year.
From a technical standpoint, if Bitcoin’s price loses the support range between $56k and $58k, the instrument will gradually slide towards $48k in the near term before rebounding to a new all-time high.
